HONG KONG, March 15, 2017 /PRNewswire/ -- Sinopec
Shanghai Petrochemical Company Limited ("Shanghai Petrochemical" or
the "Company") (HKEx: 00338; SSE: 600688; NYSE: SHI) today
announced the audited operating results of the Company and its
subsidiaries (the "Group") prepared under International Financial
Reporting Standards ("IFRS") for the year ended 31 December 2016 (the "Year").
According to IFRS, revenue of the Group for the Year amounted to
RMB 77,842.9 million. The net profit
attributable to owners of the Company amounting to RMB 5,968.5 million, representing a surge of
82.28% compared to the same period last year. Basic earnings per
share amounted to RMB 0.553 (2015:
basic earnings per share was RMB
0.303). The Board of Directors recommended the distribution
of cash dividend in respect of the year ended 31 December 2016 of RMB
2.50 (VAT inclusive) for every 10 shares to all shareholders
for the Year (2015: annual dividend was RMB
1.00 for every 10 shares).
Mr. Wang Zhiqing, Chairman of Shanghai Petrochemical, said, "In
2016, the global economy continued its recovery, growing at a rate
higher than that in 2015. Growth in developed economies was more
subdued than expected while a positive recovery was seen in
emerging markets and developing economies. The Chinese economy
encountered a slower growth rate, with an annual GDP growth at
6.7%, down by 0.2 percentage point from 2015. Structural problems
associated with the overcapacity of refining and petrochemical
production remained overwhelming and restrictions on resources,
environmental protection and safety became more stringent. However,
as compared with the significant drop of international oil prices
during the year, the decline in prices for downstream refining and
petrochemical products was less remarkable, which resulted in an
increase in the gross profit of such products and a rise in the
corporate returns. The Group actively responded to the complex
market conditions in 2016. Focusing on overall efficiency, the
Group made great efforts in safety production and environmental
protection standards, optimizing operations, exploring new markets
as well as cutting costs and expenses. As a result, a good
performance was achieved in production and operations, and there
was a significant increase in economic efficiency as compared to
the previous year."
In 2016, the Group's net sales amounted to RMB 65,936.5 million, representing a slight
decrease of 1.64% year-on-year. Of which, net sales of synthetic
fibres, resins and plastics, intermediate petrochemicals and
petroleum products decreased by 20.30%、1.95%、5.41%、and 22.07%
respectively. Net sales of trading of petrochemical products
increased by 50.06%.
For the year under review, the Group recorded a decline in total
processing capacity due to maintenance of major refining plants.
The deduction of total processing capacity resulted in a decrease
in actual production volume of the Group, which amounted to
12,830,600 tons, down 7.47% from the previous year. In 2016, the
Group processed 14,302,800 tons of crude oil (including 2,588,000
tons of crude oil processed on a sub-contract basis), representing
a year-on-year decrease of 3.33%. Total production output of
refined oil products amounted to 8,359,200 tons, down by 6.87%,
among which the Group produced 2,878,700 tons of gasoline, down by
7.07%; 3,882,200 tons of diesel, down by 8.98%, and 1,598,300 tons
of jet fuel, down by 0.91%. The Group produced 825,600 tons of
ethylene, down by 1.3%; 670,600 paraxylene, up by 1.65%. Its
output-to-sales ratio and receivable recovery ratio were 100.27%
and 100%, respectively.
During 2016, international crude oil prices showed a rebound
after a period of fluctuation. The average unit cost of crude oil
processed by the Group (for its own account) was RMB 1,979.58 per ton, down by 21.86% over the
previous year. The Group's cost of processing crude oil in 2016
accounted for 41.60% of the total cost of sales.
The Group thoroughly analyzed and implemented a safety and
production accountability system, stringently managed contractor
qualifications, personnel training as well as the assessment
irregularities. Moreover, the Group actively promoted the hazard
and operability study (HAZOP) analysis, and conducted in-depth
investigations and the elimination of hidden safety hazards. On top
of that, there was an optimization and adjustment in facilities and
inspection plan to strengthen on-site maintenance management. The
overall production and operation was continuously improved; efforts
to intensify optimization and cost/expenditure reduction. The Group
continued to implement its dynamic optimization mechanism and
thoroughly improved the crude oil structure, equipment workload,
raw materials, as well as product structure and processing
procedures; continued to carry out various measures in energy
conservation and emission reduction in compliance with the relevant
state requirements, thereby achieve all targets set by the
government. In terms of marketing, the Group continued to focus on
the development of sales through Internet+, export expansion,
advanced technical services and improvement in incentive mechanisms
achieved in significant outcome in market development; facilitated
project construction, R&D and IT projects steadily and
implemented enhancement and transformation for multiple projects.
The Group further optimized its organizational structure and work
standards, revised the management requirements, improved appraisal
methods and incentivized its departments so as to maximize the
overall efficiency of the Company.
Looking forward, Mr. Wang Zhiqing said, "The outlook for growth
in the global economy is pessimistic in 2017. Problems including
the decline in the global potential growth rate, fragile financial
market, weakened trade and investment, an increasingly obvious
anti-globalization trend, coupled with the impact of uncertainties,
such as geopolitics risk, refugee crisis, political cycles of the
major countries and terrorism will have a great effect on the
stability and development of the global economy and intensify the
challenges for the global economic recovery. The Chinese economy
has been experiencing a new normal and at the same time will
maintain an L-shaped developing trend for a prolonged period. In
2017, China will accelerate its
supply-side structural economic reform and will also endeavor to
revitalize the real economy which further stimulates the market
dynamism. However, at the same time, the gross demand is facing a
downturn trend as the structural conflicts in China's economy remain prominent for a long
period of time. The domestic growth momentum is greatly hindered by
various challenges regarding economic development which poses a
great downward pressure on the economic growth. In 2017, under the
sustained yet complex market and operations environment, the Group
will continue to adhere to the enhancement of development quality
and effectiveness, enhance safety and environmental protection,
strengthen production and operation standards, maximize system
optimization, lower costs and enhance efficiency to promote further
development of the company."
Shanghai Petrochemical is one of the largest petrochemical
companies in China in terms of
sales revenue and was one of the first Chinese companies to
complete a global securities offering. Located at Jinshanwei in
southwest Shanghai, the Group is a
highly integrated petrochemicals enterprise which processes crude
oil into a broad range of products such as synthetic fibres, resins
and plastics, intermediate petrochemicals and petroleum
products.
This press release contains statements of a forward-looking
nature. These statements are made under the "safe harbor"
provisions of the U.S. Private Securities Litigation Reform Act of
1995. You can identify these forward-looking statements by
terminology such as "will", "expects", "anticipates", "future",
"intends", "plans", "believes", "estimates" and similar statements.
The accuracy of these statements may be impacted by a number of
business risks and uncertainties that could cause actual results to
differ materially from those projected or anticipated, including
risks such as the risk that the PRC economy may not grow at the
same rate in future periods as it has in the last several years, or
at all, due to the PRC government's implementation of
macro-economic control measures to curb over-heating of the PRC
economy; the risk of uncertainty as to global economic growth in
future periods; the risk that prices of the Company's raw
materials, particularly crude oil, will continue to increase, the
Company may not be able to raise the prices of its products as
appropriate, which would adversely affect the Company's
profitability; the risk that new marketing and sales strategies may
not be effective; the risk that fluctuations in demand for the
Company's products may cause the Company to either over-invest or
under-invest in production capacity in one or more of its four
major product categories; the risk that investments in new
technologies and development cycles may not produce the benefits
anticipated by the management; the risk that the trading price of
the Company's shares may decrease for a variety of reasons, some of
which may be beyond the control of the management; the risk of
competition in the Company's existing and potential markets; and
other risks outlined in the Company's filings with the U.S.
Securities and Exchange Commission. The Company does not undertake
any obligation to update this forward-looking information, except
as required under applicable laws.
Encl: Consolidated Income Statement
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SOURCE Sinopec Shanghai Petrochemical Company Limited